Seniors should be wary of spending too much on grandchildren

With the global economic crisis dictating how people manage their finances, will grandparents reconsider their spending on grandkids this holiday season?

Not 56-year-old Merle Turitz.

Economic conditions have not impacted her Hanukkah spending the last several years. "When it comes to my grandchildren, I don't have a budget," she said.

Turitz, who raised four sons as a single mother, serves as project director for the Retired and Senior Volunteer Program of Monroe County in Stroudsburg. She buys year-round for her two grandchildren — 4-year-old Elise Ruben and 1½-year-old Zachary Ruben — but is generally careful in what she spends.

"When my kids were younger, my son said, 'Mom won't let you buy that, it doesn't have a red tag on it.' My children know I've been thrifty," she said.

"For my little ones, it's been a long time since I purchased anything for 2- and 4-year-olds, so I enjoy that part of the indulging," she said.

Turitz isn't the only grandparent refusing to let a struggling economy dampen her spending. Grandparents spend roughly $52 billion annually on their grandchildren, according to grandparents.com.

Erin Baehr, president of Stroudsburg-based Baehr Family Financial, said that "with grandkids, sometimes we tend to be more indulgent and want to do things for them."

A lot of times, Baehr sees seniors give money to grandchildren because their parents are having difficulty paying for extras like karate classes. "The financial situation of children and grandchildren is causing them to do more than maybe they have in the past," she said.

According to a September MetLife study, 34 percent of grandparents age 45 and older said their generosity toward their children and grandchildren is negatively impacting their own finances.

While her customer base is not seniors, Baehr's seen "quite a few seniors spend a little too much on their grandkids. 'Too much' is a subjective term, though. They like to spend money on their grandkids and I'm advocating for them not to run out of money."

Gretchen Peters, access service coordinator for Monroe County Area Agency on Aging in Stroudsburg, has witnessed seniors on the lower-income scale struggle to find an economical gift. "The expectations children have are high, and a lot of grandparents can't afford that," she said. "They're trying to find a nice gift their grandchildren will like, that isn't old-fashioned or something they'll wrinkle their nose up at in disappointment."

Peters added that the state of the economy has forced seniors to make lifestyle choices that may have an impact on their holiday spending. "It becomes difficult for seniors to make ends meet," she said. "If they're smart, they're on a holiday budget. But we do have people who get themselves in a hole, paying off Christmas all year."

Pat Sobotka, 72, of Bushkill, said economic conditions since 2008 have negatively impacted her Christmas spending, and "the way it's going, the economy's going to affect spending even more," she said.

Sobotka and her husband, Chuck, have six grandchildren, ranging in age from 18 to 31, and four great-grandchildren, ranging in age from 1½ to 4. "We usually send them about $25 each (in cash or gift cards)," she said. "Even $25, what does it buy today?"

Baehr, 46, and her husband set an annual budget outlining what they're going to spend on their children and three grandchildren, who range in age from 6 months to 2 years old.

"We try hard to stay within that," she said, adding that even for people who haven't really been affected by the economy, "they have a feeling of uncertainty. They don't know what's going to happen, so they're hesitant to spend as much as they used to."

Marion Rosenbaum, 66, of Stroud Township, said that in terms of gift-giving, her family tends to stay quiet during the holiday season. While she prefers not to focus on the materialistic aspect of the holidays, "there's always an exception," she said, adding that she sends her 10-year-old grandson money or a check. "It's not significant, it's (more of) a gesture."

Some Jewish families, Rosenbaum said, "try to duplicate Christmas by giving a child one gift for every Hanukkah candle, but we've never done that."

Rosenbaum, who also has four additional grandchildren through marriage, feels that her family is fortunate in general, even if she doesn't spend a ton of money on grandchildren for the holidays.

"My husband and I have a fairly modest income level; there's not a lot of extra money running around," she said. "We have to learn how to conserve and not spend what we don't have. I feel compelled to keep working, with the economy being what it is."

In the past, Sobotka and her husband gave holiday gifts to everyone. Now, they only give to great-grandchildren and grandchildren who do not have kids. "When we both worked, we got more, but we're both retired now," she said. "If I come into wealth, which I'm not counting on, it (the spending level) may increase."

With the National Retail Federation forecasting that 2012 holiday sales will jump 4.1 percent to $586.1 billion, it's probable that some grandparents will display their giving nature with grandchildren this holiday season, even as a troubled economy looms over them.

For generous grandparents, Baehr stresses to look at "what you can spend, look at it less emotionally, and start from there to see what you can do within your budget, without hurting your long-term finances. Holidays are emotional to begin with. When you throw grandkids into it, it's sometimes hard to resist."

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